Monday 25 Sep 2023
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This article first appeared in The Edge Malaysia Weekly on April 5, 2021 - April 11, 2021

EDUCATIONAL institutions are being put to the test. Amid the accelerated shift of learning to virtual platforms and channels in the past year, the institutions that have scored well are those that pass the test of agility, so crucial in the wake of the Covid-19 pandemic.

As educators take to digital platforms like Microsoft Teams, Zoom and Google Meet to teach, the challenges posed to organisations in terms of infrastructure, talent and cost have reverberated across the board. Industry practitioners observe that funding and learning inequalities — namely access to remote learning — are the biggest hurdles among certain quarters in society, whereas the pandemic’s impact on private education is in dwindling enrolment and interrupted growth plans.

“Those who were quicker to shift performed better and those who were slow to change, or who are unable to offer remote learning, have suffered greatly. Many have not survived the pandemic,” Prestigion K12 Education Group CEO Dr Goh Chee Leong tells The Edge. The education group acquired Sri KDU Schools, REAL Schools, REAL Kids preschools, and Cambridge English For Life enrichment centres from Paramount Corp Bhd in January 2020 for RM540.5 million.

Goh explains that the pandemic has challenged private education providers to redefine and strengthen their value proposition at a time when parents are more price sensitive, with many schools being forced to rethink their cost structure and to be more strategic in the prioritisation of resources.

Alister Bartholomew, Southeast Asia’s regional director at Beaconhouse, estimates that the global education industry was valued at approximately US$100 billion in 2016, with the private and international education industry in Malaysia collectively generating tens of billions of ringgit in revenue in 2018 and 2019.

“Speaking from a business perspective, the pandemic has been a dampener on market growth, stalling the upward trajectory of the segment,” he says.

Revenues have been hit amid dwindling enrolment numbers. For Main Market-listed SEG International Bhd (SEGi) — a private tertiary institution for accounting, early childhood, engineering and business — its revenue for the fourth quarter ended Dec 31, 2020, dipped 11% to RM52.3 million from RM58.8 million in the same quarter the year before. Its net profit of RM8.7 million was 16% lower than RM10.4 million previously. The group attributes the financial impact on its bottom line to delayed new enrolments caused by the Movement Control Order (MCO) and border controls due to the pandemic.

The same has been observed at the education arm of integrated construction, property and engineering outfit Protasco Bhd. For the fiscal year ended Dec 31, 2020, its education segment posted a loss before tax of RM3.5 million, plunging 759% from a profit of RM512,000 the year before. Revenue was also a fifth lower at RM35.3 million, from RM44.3 million before.

SEGi Group executive director and group CEO Hew Moi Lan says SEGi has developed new courses to meet current and future market demands given that the workforce will require new skills, including upskilling in technology and soft skills, as well as to strengthen mental capabilities.

Sunway Education Group CEO Prof Dr Elizabeth Lee says Sunway’s year-on-year enrolment growth from 2019 to 2020 was slower than usual because of the pandemic, leading to missed projected growth numbers. Its international students make up about 10% of the group’s total student population of about 30,000 across its university, colleges and international schools.

“In absolute terms, we have been able to maintain our student enrolment numbers as, so far in 2021, student enrolment rates have remained stable, and we have forecasted moderate growth of about 5%. We have found that students are eager to continue their education trajectory, especially in pre-university and foundation programmes. By providing hybrid learning options comprising both online and face-to-face interactions, our students have the choice of their preferred mode of learning.

“In light also of the delayed SPM 2020 examinations, which will be completed in March 2021, we do hope to see an increase in student enrolment in 2Q or 3Q2021. Yearly, there are approximately 400,000 students sitting for the SPM. This is an important market for us,” she explains.

Meanwhile, Beaconhouse, which has 15 schools across Southeast Asia — 13 in Malaysia, three in the Philippines and four in Thailand — will focus on diversifying its educational services to offer professional development programmes for teachers by venturing into school evaluations and curriculum development in general.

“We also see value in exploring language-centric schools and curriculars and find similar potential in establishing summer school programmes,” Bartholomew says.

Hybrid learning as the new norm

For Prestigion, its teachers at the Sri KDU International School in Klang were provided with sufficient training to become a Microsoft Innovative Educator (MIE), thus enabling them to be effective in using online platforms. Similarly, its REAL schools have embarked on an Apple iPad programme, where the institution’s students and teachers received iPads. The teachers had completed their Apple Teacher certification training in 2019.

Such initiatives proved advantageous to education institutions already savvy with remote learning as they were more prepared to make the transition when the country went into lockdown on March 18, last year.

Beyond using digital platforms to enhance classroom learning, Prestigion’s virtual learning experience was designed to provide students with the opportunity to engage in activities through virtual platforms so that school remains a fun and immersive experience.

Goh explains that some of its schools have exceeded targets. REAL school in Johor Baru, for one, has grown by more than 20% over the last 12 months and exceeded 2021 target numbers by more than 100 students.

“Predictably, our preschools and language centres have been impacted by the lockdowns in 2020, with enrolments down in spite of hybrid and remote learning being offered. We have seen a slight rebound in numbers at the start of 2021 and are confident that the numbers will continue to grow through 2021 as the Covid situation eases,” Goh says.

While digital education is clearly the way forward — namely for higher educational institutions — there are costs for both students and institutions. Going digital incurs higher expenditure from software applications, hardware, cybersecurity features as well as subscription fees.

“With hybrid and online learning being the new norm, investing in this field to stay ahead ensures that students are ready for a digital and technology-driven world when they graduate. Online learning provides students with the flexibility to learn at their own time, in their own space and, to an extent, at their own pace. [Fortunately,] our students have adapted quite well,” Sunway’s Lee says.

In fact, at the onset of the MCO, education providers rolled out programmes, many of which were developed in partnership with industry leaders and governmental agencies, to give talents and entrepreneurs exposure to the industry amid the challenging economic circumstances.

Apart from partnerships with, Malaysia Digital Economy Corporation, Malaysian Global Innovation and Creativity Centre (MaGIC) and Cradle Fund Sdn Bhd, Sunway runs 42KL as part of the global phenomenon non-profit Ecole 42, offering free training in the fields of computer coding, digital, software and telecommunications to address the domestic talent gap in technology development.

SEGi’s Hew says her institute has also pushed ahead with technology. “Although we might have a challenging year ahead of us, we are cautiously optimistic that the adaptation of new technologies has enabled SEGi to inculcate a culture of continuous innovation and agility. This is also a skill that we are committed to instil in our students via our programmes where we integrate relevant Industrial Revolution (IR) 4.0 subjects to prepare our students for the future and create more value for our students.”

More affordable schooling options

To help students mitigate the adverse effects of the pandemic, SEGi offers various scholarships and flexible payment schemes to affected students who ask.

Over the last 12 months, student movement has been observed, with the majority of parents looking for more affordable schooling options for their children.

Prestigion’s Goh points out that the Sri KDU School in Kota Damansara, for instance, received students coming from more expensive schools, as parents perceived the quality of education and academic outcomes to be similar but at a much lower price point.

He also observes a segment of parents choosing to let their children remain in public schools for a few more years rather than transition to private schools.

However, that segment shrank throughout the year as the Covid-19 situation persisted and more parents opted for private schools because hybrid learning options were not available in some public schools, Goh says.

“With the infection rates going down and the rolling out of the vaccines, I believe we can look forward to better days ahead. While the pandemic was certainly a time of uncertainty, students should now be able to plan their education pathways and enrol into programmes and institutions of their choice. However, I can envisage that the mode of learning could very well change with a lot more online support and perhaps even learning-on-demand so students may want to be able to access more supplementary online learning outside the formal classroom time at their leisure,” Sunway’s Lee says.

SEGi’s Hew believes that private education will continue to play an important role in developing the coming generation. Favourable underlying drivers towards the market growth include the growing population base, rising household income and supportive education policies, she explains.

“Strategies from the Malaysia Education Blueprint 2015-2025 aim to place Malaysian universities in the Global Top 100 by 2025 as well as to increase its number of international students to 250,000 by 2025. With this, we foresee continuing growth in the private education sector,” she says.


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